Exam 30: Liability of Principals, Agents, and Independent Contractors

A principal who hires an unqualified independent contractor remains free of liability if that person injures someone while on the job.

The coming and going rule provides which of the following?

An agent can usurp an opportunity available to the principal.

An agent generally is not liable on contracts made in connection with a fully disclosed agency.

Misuse of confidential information is not considered to be a breach of the duty of loyalty as long as it benefits the agency.

John has been hired by Bubbaweiser Beer Company to purchase an airplane.He approaches Sam who has a Cessna for sale.John does not mention that he is making this purchase on behalf of someone else.He negotiates a deal.Two weeks later,Sam learns that John did not negotiate the deal for himself,but was acting as an agent.Bubbaweiser declares bankruptcy and cannot buy the plane.John:

Where an agent has disclosed that she is an agent,but has not disclosed the identity of the principal,who can be held liable on an authorized contract entered into by the agent on the principal's behalf?

All of the following are duties of the agent to the principal except:

An agent enters into an authorized contract on behalf of the principal.The principal breached the contract and the agent was held to be liable due to the breach of the principal.The agent can seek to recover from the principal based on the principal's duty of:

Does the frolic and detour rule make sense? Is it too subject to manipulation and subjective interpretation? Is there a more workable rule that you can think of?

If an agent negligently injures a third party while acting within the scope of employment,which of the following is true?

Abe is an associate (employee)with that famous Denver law firm,Dewey,Cheatem,& How.One Thursday Abe and another associate,Gabe,had to go to western Colorado for a client's deposition.The deposition is unexpectedly over in midmorning and they start driving back to Denver.As they approach Vail,Gabe reminds Abe that the partners are in Aspen for 2 days and how it would be nice to be a partner.Abe says,"If they're in Aspen,that means they're not in the office in Denver.I hear the slopes calling for a half-day of skiing." They pull off I-70 and are skiing by 1 p.m.By chance,Abe runs into a client from Denver and they ski together and discuss the client's latest legal matters.As Abe is skiing with this client,Abe and the client both ski through a beginner ski lesson group as the beginner students practice their snowplow technique.Abe and the client each injure one skier.Five claims are filed: 1.Abe's victim sues Abe. 2.Abe's victim sues the law firm. 3.The client's victim sues the client. 4.The client's victim sues Abe. 5.The client's victim sues the law firm. Discuss the outcome of each claim,assuming Abe was solely negligent with respect to his victim and the client was solely negligent with respect to his victim.

In an undisclosed agency,both the principal and the agent are liable on the contract with the third party.

Generally,if an agent negligently injures a third party within the scope of the agency,the principal can be held liable even if the agent was violating the instructions of the principal.Is this fair to the principal? What is the justification for this rule?

A principal hires an agent to place advertising in publications to reach certain target audiences.The agent places 45 percent of the advertising in a magazine of which he is the owner.The principal could probably recover from the agent on the grounds of:

An agent may not be liable for the tortious conduct of his or her principal if he or she merely indirectly participated in the principal's conduct.

Jerry was employed as a blackjack dealer in a Las Vegas casino.One evening as he dealt,a patron became more and more abusive,insulting Jerry,using profanity,and finally making personal insults about Jerry's appearance.Jerry became very angry and hit the patron.The patron sued both Jerry and the casino.Discuss the liability of Jerry and the casino,assuming that Jerry's actions were not justified.

Jane takes her car to Joe's Garage,leaving it there for repairs.Ted,one of Joe's employees,takes the car for a joy ride,without Joe's permission.In fact,Joe has a very strict rule that his employees cannot drive customers' cars except to diagnose or test them.Ted crashes into another car,driven by Mary.Mary is injured and sues Jane,Ted,and Joe.Which of the following is true?

Rocky Mountain Mall hired George to be a Santa Claus in the mall.After a tough day of demanding kids,George stops at a bar in the mall for a cold beer.Before he knows it,he's had six beers and heads home still wearing his Santa suit.While driving,he injures a pedestrian.The injured pedestrian sues the owner of the shopping mall.Which of the following is true?

Pedro hires Andrea to negotiate the purchase of a sailboat for Pedro.Andrea decides to buy from Sally a sailboat meeting Pedro's specifications.Andrea tells Sally that the purchase is really being made by Pedro,and Andrea and Sally sign a written contract,with Andrea signing on Pedro's behalf.Based on all this: